• Sam Bankman-Fried (SBF), the founder of crypto exchange FTX, has been extradited from the Bahamas to the United States and set to appear in a Manhattan federal court on Thursday.
• Former business partners Caroline Ellison and Gary Wang have turned on Bankman-Fried, likely in an effort to secure lighter sentencing for themselves.
• The extradition comes after days of confusion, and the US Securities and Exchange Commission’s (SEC) civil complaint against Ellison and Wang paints a damning picture of Bankman-Fried.
Sam Bankman-Fried, the founder of crypto exchange FTX, has been extradited to the United States and is set to appear in a Manhattan federal court this coming Thursday. Bankman-Fried has been flown on a US government plane to New York from the Bahamas, where he has spent the past few days at the infamous Fox Hill detention facility. He was escorted by US federal agents on his journey back to his homeland.
The news of the extradition comes as reports indicate that Bankman-Fried’s former business partners Caroline Ellison and Gary Wang have turned on him, possibly in an attempt to secure lighter sentencing for themselves. The fact that the two are cooperating with the investigation was confirmed in a recent statement from the US Attorney for the Southern District of New York. Moreover, after the Securities and Exchange Commission’s (SEC) civil complaint against the two was made public, the document was shared on Twitter where users showed how it is clearly built on participation from Ellison and Wang. The documents paint a damning picture of Bankman-Fried, portraying him as the main person behind many of the wrong actions that ultimately led to FTX’s collapse.
The remarkable speed at which the investigation has moved was pointed out today by the crypto-focused lawyer Jake Chervinsky, who noted that Bankman-Fried just two months ago was debating future crypto regulations. “Today, SBF is in FBI custody and his chief co-conspirators have pleaded guilty,” Chervinsky wrote, adding “it’s amazing how fast this has all unfolded.”
Among the accusations in the documents is that Alameda Research, the crypto trading firm owned by Bankman-Fried and led by Caroline Ellison, manipulated the price of FTX’s exchange token FTT. “[…] at Bankman-Fried’s direction,” Ellison would purchase large amounts of FTT on the open market, propping up its price. FTT was then in turn used as collateral for undisclosed loans by FTX to Alameda, giving the trading firm “a virtually unlimited ‘line of credit’ funded by the platform’s customers,” the SEC’s complaint said.
Wednesday’s extradition to the US came a day after Bankman-Fried signed papers to waive an extradition hearing from the Bahamas, following a period of confusion around the issue. On Tuesday, the crypto boss did not appear in court even as his lawyers and U.S. consular officials waited for two hours. Prior to that, in a Monday hearing, Bankman-Fried declined to waive extradition, which surprised his lawyer and prompted courtroom confusion. Subsequently, the judge sent him back to jail.
The extradition of Sam Bankman-Fried to the United States and his upcoming court appearance on Thursday, combined with the revelations of his former business partners Caroline Ellison and Gary Wang cooperating with the investigation, paint a damning picture of the disgraced crypto exchange founder. The speed of the investigation has also been remarkable, with Bankman-Fried just two months ago debating future crypto regulations and now being in FBI custody. It remains to be seen what will happen to Bankman-Fried, but it seems that the investigation is moving quickly and the end result may be severe.